Rethink the Japan Fighter Deal

Published: March 18, 1989

Congress and the Administration are having welcome second thoughts about the Japan fighter deal negotiated by the Pentagon. It's by no means clear that the Pentagon took America's commercial interests fully into account or, as it contends, that it got the best deal available.

The deal on the table is that Mitsubishi Heavy Industries will develop the FSX, an essentially new plane loosely modeled on the F-16, America's front-line fighter. Mitsubishi would gain access to the F-16's technology. In return General Dynamics would get part of the development work and a vague promise of 40 percent of the production.

Robert Mosbacher, the new Secretary of Commerce, has rightly complained of his department's exclusion from the negotiations. His concerns have been backed by Mr. Bush's chief of staff, John Sununu, who is skeptical of the Pentagon's technical arguments. Mr. Bush's best choices are to cancel the deal outright or at least insist that its vague language be tightened to safeguard U.S. interests.

Amid the complex arguments for and against the deal, there are two basic points:

First, Japan can use its defense dollars best by buying an American plane off the shelf. Developing its own at twice the cost would increase America's already heavy share of Japan's defense costs.

Second, America's trade deficit with Japan is a painful $50 billion a year and getting no better. The F-16 is a high quality product at an unmatchable price. Why wouldn't Japan seize such a chance to help itself and its chief ally and trading partner?

The Pentagon accepts both these arguments but says Japan simply refuses to buy off the shelf; the FSX deal was the best the Pentagon could strike. It says the United States will get access to important Japanese technology. And it ridicules assertions that the deal could help Japan with its professed goal of building a civil aviation industry; F-16 technology, it argues, is old and irrelevant to commercial planes. But consider:

* Though a 1970's design, the F-16 is constantly upgraded; the technology is by no means old. Of most use to Japan's civil aviation goals, however, is not any specific technology but the experience of integrating various technologies in a single plane.

* There is no documentation of the claims that Japan has important technical breakthroughs to offer through the FSX deal. These are paper promises. If Japan has technology of military interest, the Pentagon can surely license it specifically.

* Japan's claim that it prefers to build its own fighter and agreed to the FSX only as a concession may be only a shrewd bargaining position. The last all-Japanese fighter, the F-1, was not very successful. Despite its formidable manufacturing skills, Japan could probably not build an adequate modern fighter without American help.

The Japanese are tough, defensive negotiators. In the FSX deal they have resolutely pursued their own commercial interests while the United States has allowed commercial interests to take second place to defense and foreign affairs.

Mr. Bush's best course would be to cancel the FSX deal, and count on Japan to recognize the obligations of its intimate partnership with the United States. As second best, he could insist on tightening the deal's vague promises of technology transfer and production shares. With the loopholes in the FSX deal closed, Japan might then choose to do what is in both countries' mutual interest - buy American fighter planes.